India is the seventh largest country in the world. As an investment destination its greatest strength is in the manufacturing and service industry. Natural resources and agricultural products attract viable global partners. There are to kinds of investment in the Indian stock funds - foreign portfolio investments (FPI) and foreign direct investments. Sectors attracting highest Foreign Direct Investment (FDI) are electrical equipment, services sector (financial and non financial) telecommunication, transport industry, fuel, chemical, construction drugs and pharmaceuticals knowledge process outsourcing (KPO) and real estates. As a manufacturing and services hub with the fourth largest economy in terms of purchasing power parity (PPP) and the tenth most industrialized country, India is a vibrant macro-economic market.

Foreign investment has increased through Foreign Institutional Investment (FII) and Foreign Direct Investment (FDI). This is without considering reinvested earnings and other capital components. Sectors attracting highest cumulative foreign direct investment in the India stock market are related to the electrical equipments and the services and telecommunication.

Governments’ role

Foreign direct Investment proposals are expedited. Multi-agency consultations address investor concerns. The Government acts as a gateway to industrial investment providing a single window clearance for entrepreneurial assistance and facilitates processing of investor applications requiring approval. Brand Equity foundation, investment commission, investment implementation authority and foreign investment promotion board collectively embrace the multi-sect oral approach.

Each individual state has distinct strengths which have world-renowned companies investing in them. State Government has policy measures and incentives that highlight major foreign direct investment (FDI) thus reflecting state economy. Some of the companies investing in the states are quoted on the stock markets.